Audi Mexico Workers End 3-Week Strike : The Week in Automotive

Audi Mexico workers have secured a 10.2% pay raise, ending the three-week strike. Meanwhile, Mercedes-Benz has initiated a global recall of over 250,000 vehicles, and XCMG invests US$80 million in Nuevo Leon. In other news, the United States blocks European car imports tied to Chinese parts. Additionally, Volkswagen is facing US scrutiny over alleged forced labor, and the heavy vehicle sector in Mexico grapples with declining production. 

Discover more in this week's automotive roundup!

Mercedes-Benz Recalls Over 250,000 Vehicles Globally

Mercedes-Benz is issuing a global recall for over 250,000 vehicles due to potential fuse-related issues reported by the German Federal Motor Transport Authority. The recall affects various 2023 models, including AMG GT, C-Class, CLE, E-Class, EQE, EQS, GLC, S-Class, and SL, with over 37,000 potentially impacted in Germany alone. Identified fuse problems could lead to engine failure, compromised retention functions, or fire risks. To address this, Mercedes-Benz is proactively replacing specific components in a free-of-charge recall, urging affected owners to promptly schedule repairs for safety assurance.

New Union Strike Threat Looms at Ford's Kentucky Truck Plant

A potential strike looms at Ford's Kentucky Truck Plant as the United Auto Workers (UAW) union addresses unresolved issues, including safety concerns, nurse staffing, and workforce reductions. The strike, set for Feb. 23, signals strained negotiations. This follows CEO Jim Farley's acknowledgment of the previous strike's impact on Ford's union relations, revealing it cost the company $1.7 billion and influenced future plant decisions. The upcoming strike could further shape Ford's approach to labor negotiations and production strategies, reflecting the evolving dynamics between automakers and unions.

Volkswagen Invests US$942 Million in Puebla For Electromobility

Volkswagen de México plans a substantial $942 million investment in electromobility in Puebla, building on the prior 2022 investment of $44.7 million. This reinforces Puebla's role as a key hub for industrial growth and innovation. Holger Nestler, CEO of Volkswagen Mexico, emphasizes the commitment to electrification in Puebla, aligning with environmental, social, and corporate governance criteria. With over 349,000 vehicles manufactured in 2023 and a 34.7% growth in EV production, the investment reflects the region's importance in Volkswagen's global strategy and supports a sustainable future for the automotive industry in Puebla.

Audi Mexico Workers Secure 10.2% Pay Raise, End Strike

Audi Mexico's San Jose Chiapa plant workers have secured a notable 10.2% salary increase, ending a three-week strike. This agreement stands as one of the automotive sector's most substantial raises in Mexico. Negotiations faced initial hurdles, but the final deal includes a 7% salary increase, a 3.2% benefits boost, retroactive payments from Dec. 1, 2023, and various additional provisions. This development follows a trend set by General Motors in Silao, Guanajuato, marking a notable achievement in the Mexican automotive industry's labor landscape and ensuring transparency in the negotiation process.

XCMG to Establish US$80 Million Second Plant in Nuevo Leon

Chinese heavy machinery manufacturer XCMG is set to establish its second plant in Nuevo Leon, Mexico, with a total investment of US$80 million. This expansion is part of XCMG's strategic growth plan, focusing on manufacturing scissor lifts for the North American market. The move follows the company's successful entry into Nuevo León in 2021 and reflects its confidence in the region's business-friendly environment and strategic location. The new plant is expected to generate 300 new employment opportunities, reinforcing the company's commitment to providing innovative solutions tailored to customer needs.

Mexico's Heavy Vehicle Sector Sees Decline in 2024 Start
 

Mexico's heavy vehicle manufacturing sector faced a challenging start in 2024, with January witnessing a significant decline in production and exports. According to data from the National Institute of Statistics and Geography (INEGI), heavy vehicle production decreased by 16.1%, with 15,587 units manufactured. Exports experienced a more substantial decline, falling by 21.9%, totaling 11,891 units in January. Factors contributing to the decline include subdued economic activity in key markets like the United States and Canada. Despite the challenging start, the National Association of Bus, Truck, and Tractor Manufacturers (ANPACT) remains optimistic about the industry's outlook for the remainder of 2024.

US Blocks European Car Imports Over Chinese Parts

US customs officials have detained luxury vehicles, including Porsche and Audi models imported by Volkswagen, due to a Chinese-made electronic component linked to alleged forced labor in Xinjiang. The delay is in accordance with the US's Uyghur Forced Labor Prevention Act. Volkswagen confirmed the delay, expressing commitment to addressing human rights concerns. This incident highlights the challenges associated with Chinese-made components in the automotive industry and follows previous allegations of forced labor in Xinjiang against Volkswagen. In Mexico, Chinese car imports are rising, prompting discussions on local assembly plants for efficiency and production increases.